(a) Definition of underserved community
In this section:

(1) In general
The term "underserved community" means a political subdivision of a State that, as determined by the Administrator, has an inadequate system for obtaining drinking water.

(2) Inclusions
The term "underserved community" includes a political subdivision of a State that either, as determined by the Administrator—

(A) does not have household drinking water or wastewater services; or

(B) is served by a public water system that violates, or exceeds, as applicable, a requirement of a national primary drinking water regulation issued under section 300g–1 of this title, including—

(i) a maximum contaminant level;

(ii) a treatment technique; and

(iii) an action level.

(b) Establishment

(1) In general
The Administrator shall establish a program under which grants are provided to eligible entities for use in carrying out projects and activities the primary purposes of which are to assist public water systems in meeting the requirements of this subchapter.

(2) Inclusions
Projects and activities under paragraph (1) include—

(A) investments necessary for the public water system to comply with the requirements of this subchapter;

(B) assistance that directly and primarily benefits the disadvantaged community on a per-household basis; and

(C) programs to provide household water quality testing, including testing for unregulated contaminants.

(c) Eligible entities
An eligible entity under this section—

(1) is—

(A) a public water system;

(B) a water system that is located in an area governed by an Indian Tribe; or

(C) a State, on behalf of an underserved community; and

(2) serves a community—

(A) that, under affordability criteria established by the State under section 300j–12(d)(3) of this title, is determined by the State—

(i) to be a disadvantaged community; or

(ii) to be a community that may become a disadvantaged community as a result of carrying out a project or activity under subsection (b); or

(B) with a population of less than 10,000 individuals that the Administrator determines does not have the capacity to incur debt sufficient to finance a project or activity under subsection (b).

(d) Priority
In prioritizing projects and activities for implementation under this section, the Administrator shall give priority to projects and activities that benefit underserved communities.

(e) Local participation
In prioritizing projects and activities for implementation under this section, the Administrator shall consult with and consider the priorities of States, Indian Tribes, and local governments in which communities described in subsection (c)(2) are located.

(f) Technical, managerial, and financial capability
The Administrator may provide assistance to increase the technical, managerial, and financial capability of an eligible entity receiving a grant under this section if the Administrator determines that the eligible entity lacks appropriate technical, managerial, or financial capability and is not receiving such assistance under another Federal program.

(g) Cost sharing
Before providing a grant to an eligible entity under this section, the Administrator shall enter into a binding agreement with the eligible entity to require the eligible entity—

(1) to pay not less than 45 percent of the total costs of the project or activity, which may include services, materials, supplies, or other in-kind contributions;

(2) to provide any land, easements, rights-of-way, and relocations necessary to carry out the project or activity; and

(3) to pay 100 percent of any operation and maintenance costs associated with the project or activity.

(h) Waiver
The Administrator may waive, in whole or in part, the requirement under subsection (g)(1) if the Administrator determines that an eligible entity is unable to pay, or would experience significant financial hardship if required to pay, the non-Federal share.

(i) Limitation on use of funds
Not more than 4 percent of funds made available for grants under this section may be used to pay the administrative costs of the Administrator.

(j) State response to contaminants

(1) In general
The Administrator may, subject to the terms and conditions of this section, issue a grant to a requesting State, on behalf of an underserved community, so the State may assist in, or otherwise carry out, necessary and appropriate activities related to a contaminant—

(A) that is determined by the State to—

(i) be present in, or likely to enter into, a public water system serving, or an underground source of drinking water for, such underserved community; and

(ii) potentially present an imminent and substantial endangerment to the health of persons; and

(B) with respect to which the State determines appropriate authorities have not acted sufficiently to protect the health of such persons.

(2) Recovery of funds
If, subsequent to the Administrator's award of a grant to a State under this subsection, any person or entity (including an eligible entity), is found by the Administrator or a court of competent jurisdiction to have caused or contributed to contamination that was detected as a result of testing conducted, or treated, with funds provided under this subsection, and such contamination violated a law administered by the Administrator, such person or entity shall, upon issuance of a final judgment or settlement and the exhaustion of all appellate and administrative remedies—

(A) notify the Administrator in writing not later than 30 days after such issuance of a final judgment or settlement and the exhaustion of all appellate and administrative remedies; and

(B) promptly pay the Administrator an amount equal to the amount of such funds.

(k) Authorization of appropriations
There are authorized to be appropriated to carry out subsections (a) through (j) of this section, $60,000,000 for each of fiscal years 2017 through 2021.

(l) Drinking water infrastructure resilience and sustainability

(1) Resilience and natural hazard
The terms "resilience" and "natural hazard" have the meaning given such terms in section 300i–2(h) of this title.

(2) In general
The Administrator may establish and carry out a program, to be known as the Drinking Water System Infrastructure Resilience and Sustainability Program, under which the Administrator, subject to the availability of appropriations for such purpose, shall award grants in each of fiscal years 2019 and 2020 to eligible entities for the purpose of increasing resilience to natural hazards.

(3) Use of funds
An eligible entity may only use grant funds received under this subsection to assist in the planning, design, construction, implementation, operation, or maintenance of a program or project that increases resilience to natural hazards through—

(A) the conservation of water or the enhancement of water use efficiency;

(B) the modification or relocation of existing drinking water system infrastructure made, or that is at risk of being, significantly impaired by natural hazards, including risks to drinking water from flooding;

(C) the design or construction of desalination facilities to serve existing communities;

(D) the enhancement of water supply through the use of watershed management and source water protection;

(E) the enhancement of energy efficiency or the use and generation of renewable energy in the conveyance or treatment of drinking water; or

(F) the development and implementation of measures to increase the resilience of the eligible entity to natural hazards.

(4) Application
To seek a grant under this subsection, the eligible entity shall submit to the Administrator an application that—

(A) includes a proposal of the program or project to be planned, designed, constructed, implemented, operated, or maintained by the eligible entity;

(B) identifies the natural hazard risk to be addressed by the proposed program or project;

(C) provides documentation prepared by a Federal, State, regional, or local government agency of the natural hazard risk to the area where the proposed program or project is to be located;

(D) includes a description of any recent natural hazard events that have affected the applicable water system;

(E) includes a description of how the proposed program or project would improve the performance of the system under the anticipated natural hazards; and

(F) explains how the proposed program or project is expected to enhance the resilience of the system to the anticipated natural hazards.

(5) Authorization of appropriations
There is authorized to be appropriated to carry out this subsection $4,000,000 for each of fiscal years 2019 and 2020.